Friday, August 28, 2015

Five of nine sectors
moved higher on Friday… XLE, XLB and XLK
were the strongest sectors and XLV was the weakest.

Breadth weakenedas
advancers led
decliners 1.92 to 1 on the NYSE and
1.90 to 1 on
the NASDAQ.

Friday – weakened, advancers led

Thursday – strengthened,
advancers led

Wednesday –
strengthened, advancers led

Tuesday – weakened,
decliners led

Monday – weakened,
decliners led

SPYup 0.01 at 199.28 on 160.4 million shares

VIXdown .05at26.05…

TNX up .18 at21.86…

TLT up .36 at122.36…

XLF down .11 at 23.63…32.7
million shares

AAPL up .37 at 113.29 on 53.1
million shares

FB up 1.28 at91.01 on 33.2 million
shares

Technical Commentary:

IWM +0.99%, SPY +0.01%, QQQ -0.02%, DIA
-0.07%

The SPX rallied for the
third straight day on Friday following Monday’s selloff and Tuesday’s volatile
trading range above support. After the
break of Monday’s high or short-term resistance on Thursday, momentum slowed
dramatically on Friday which is typical after a horizontal breakout. We look for a high probability pullback testof the breakout of Monday’s
highs.

While VIX dropped below 30 an important move for the
re-establishment of market stability, it remained above 25. If volatility stays above 25 we look forthe SPX to remain volatile between support
and resistance.

SPY, DIA, QQQ and IWM all closed higher
than last Friday’s close while forming piercing line patterns for the week. QQQ closed near the mid-section of the
prior weekly candle while SPY and IWM made just a small pierce.

Trade with the trend of
the chart you are trading and
continue to move your profit protection stops. Continue to follow your rules.

Dave Johnson, CMT

David Johnson, CMT
Investment professional for 40 years including analyst, portfolio manager, trader and trading instructor. Performing computer based technical analysis since 1990. Previously quantitative and fundamental analysis. Has trained more than 40,000 traders in over 250 events including two and four day training events.
Email: chartsignals@yahoo.com